THE $700 BILLION BAILOUT:
SAVING THE RICH AND
LETTING THE POOR SINK

By: S.R. Shearer
September 28, 2008

"Someone who lacks independent wealth has no claim to even the SMALLEST portion of food ..."

- David Ricardo,
One of the "originators" of
todayís system of capitalism,
and someone who called
himself a Christian

The rich are those who "...devour widows' houses [and people's livelihoods], and for a pretense make a long prayer ..."

- Matt. 23:14

INTRODUCTION

Michael Hudson, author of the book, Super-Imperialism, calls the economic plan the administration is trying to implement a "$700 Billion Giveaway" to the rich. He writes:

"The bankstersí plan is to take Mr. Paulsonís $700 billion and RUN. Itís not a Ďbailout of the financial systemí. Itís a giveaway - to insiders, to sell out all their bad BETS. Companies across the board will get rid of their bad mortgages, and also their bad car loans, furniture time payments, credit-card loans, student loans - all the debts that any competent actuary could have told them never could have been paid in the first place."

NOTE: These bad loans are called "TOXIC loans" because they can only be sold at a loss - A HUGE LOSS THAT CANNOT UNDER ANY CIRCUMSTANCES BE RECOUPED IN THE FUTURE, DESPITE ALL THE TALK BY WALL STREET PUNDITS AND THE ADMINISTRATION THAT SUCH A THING IS POSSIBLE.

This is the problem that Congress is not willing to come out and face. Many of these loans are just plain fraudulent. And they are being sold by crooks. Crooks who work for banks. Crooks who use accounting fraud - such as the fraud that led to the firing of Maurice Greenberg at A.I.G. and his counterparts at Fannie Mae, Freddie Mac and other companies engaging in Enron-type accounting. And one should be very clear here, itís not so much those who have defaulted on their mortgages, as it is those who "pushed" this "bad paper" on these people - often using "bait and switch" tactics - that are responsible for most of the bad mortgages. [Please see our article, "Lies and Damned Lies: Not Discerning the Truth;" please also see our article, "Lies and Deceit in the Service of the American New World Order System."]

The fact is, there is now a mathematical certainty insofar as a worldwide recession (and possibly even a depression) is concerned. The economic system that Wall Street has introduced to the American public - and the world at large - over the past few decades is the same kind of "pension-fund capitalism" (or "peoplesí capitalism" as it was called in Chile by the "Chicago Boys" working for General Pinochetís murderous regime) - "Chicago Boys" (i.e., the disciples of Leo Strauss and Alan Bloom of the University of Chicago) such as Elliott Abrams, Richard Armitage, John R. Bolton, Richard Cheney, Seth Cropsey, Paula Dobriansky, Francis Fukuyama, Bruce Jackson, Lewis Libby, Peter W. Rodman, Donald Rumsfeld, Randy Scheunemann, Paul Wolfowitz, Dov S. Zakheim, Robert B. Zoellick, Patrick Clawson, Robert Satloff, Michael Eisenstadt, Mortimer Zuckerman, Martin Peretz, Michael Ledeen, Stephen Hadley, Norman Podhoretz, Midge Decter, Richard Perle, Douglas Feith, Frank Gaffney, John Lehman, Gary Bauer, Abram Shulsky, William J. Bennett, Ellen Bork, Robert Bork, Rudy Boschwitz, Jeb Bush, Eliot A. Cohen, Thomas Donnelly, Steve Forbes, Aaron Friedberg, Reuel Marc Gerecht, Fred Ikle, Donald Kagan, Jeane Kirkpatrick, Charles Krauthammer, William Kristol, Christopher Maletz, Daniel McKivergan, Dan Quayle, Beton Michael Kaneb, Henry Rowen, Gary Schmitt, George Weigel, R. James Woolsey, Vin Weber, etc.

And these are, naturally enough, the very same people that Christians such as Paul Crouch, Jack Hayford, Charles Stanley, the late D. James Kennedy, Tim LaHaye, the late John Wimber, Juan Carlos Ortiz, C. Peter Wagner, Beverley LaHaye, Ern Baxter, Kenneth Copeland, Kenneth Hagin, Oral Roberts, Pat Robertson, the late Jerry Falwell, Chuck Colson, Robert Stearns, Mike Bickle, Reuven Doron, Che Ahn, Frank Hammond, Cindy Jacobs, Bill Hamon, John Eckhardt, Bobbie Byerly, Dutch Sheets, Jim Goll, John Paul Jackson, James Ryle, Frank Damazio, Ed Silvoso, Carlos Annacondia, Claudio Freidzon, Roger Mitchell, the now "defrocked" Ted Haggart, the pedophile Paul Cain (whose pedophilia the evangelical elites have been very careful to hide), Chuck Pierce, Rick Joyner, Kingsley Fletcher, Jim Laffoon, Barbara Wentroble, ad infinitum are in league with to "take the country (and the world) back for Christ."

The promise made by the "Chicago Boys" and - ipso facto - their evangelical allies is that if people consign their savings, pensions, and IRAs to individuals who make much, much more money than they do - and are much, much more greedy than they are - they will be assured of riches in the future. [And this is the kind of mentality that undergirds the American Church? - God help us all! (Please see our article, "The Neo-Conservatives: Exporting a Fake Christianity to the Shores of Europe in the Interest of the American New World Order System)."]

Think about the stupidity of it all! - AMERICAN WORKERS ARE SUPPOSED TO ENSURE A GOOD LIFE FOR THEMSELVES BY INVESTING THEIR MONEY WITH THE VERY SAME "CORPORATE RAIDERS" WHO FIRE, LAY OFF, DOWNSIZE AND OUTSOURCE THESE VERY SAME AMERICAN WORKERS. The trick is to persuade employees to hand retirement funding over to financial managers whose idea is to make money off the economy by extracting interest and dividends off workers, homeowners and companies being bought on "debt leverage."

Hudson goes on to say:

"As Financial Times columnist Martin Wolf noted on Wednesday, Sept. 24, the problem is that the face value of mortgage loans and a raft of other bad loans far exceeds current market prices or prices that are likely to be realized this year, next year or the year after that. They are packaged into what the financial press rightly calls Ďtoxicí. The bailout ... will [ultimately fail] he writes, Ďbecause it can only deal with insolvency by buying bad assets at far above their true value, thereby guaranteeing big losses for taxpayers and providing an open-ended bail-out to the most irresponsible investorsí ... This is the key: if debts cannot be paid, then creditors must take losses."

What Hudson is saying here is, in the capitalist system envisioned by the framers of the Constitution, if debts cannot be repaid, itís the creditors who - after liquidation of the debtors assets - must take the remaining loss.

NOTE: This principle is enshrined in the U.S. Constitution - specifically, Chapters 7 and 11 of the Constitution. The rationale behind this thinking is to FORCE investors to take the risk; if the risk pays off, the investor makes a profit; if the risk fails, the investor takes the loss. This thinking also aimed at ending the hideous institution of "debtor prisons" and "indentured servitude." RISK BELONGS TO THE CREDITOR, NOT THE DEBTOR - and thatís the reason behind rating borrowers as "good credit risks" or "bad credit risks."

This kind of thinking, as Hudson explains, is also enshrined in the Bible. How you say? - through the device of the "Jubilee," a God-ordained mechanism aimed at preventing the untoward accumulation of wealth - central to todayís capitalist system - in Old Testament Israeli society. Youíve never heard of this? - well, I'm not surprised! It's not something that the elites of this world or their "toadies" in the Religious Right would find it convenient to talk about too much.

In the Old Testament (in the Book of Leviticus) the land of Israel was to be divided EQUALLY in perpetual allotments to its citizenry. Each family was to receive a roughly equal share of the land. Now the Bible envisioned that in the course of time, some would not do as well as others and, as a result, would have to sell their land and their houses. But every fifty years, the Bible established a "Year of Jubilee" in which everything had to be restored to its original owner - even if the original owners had been "irresponsible" in losing control over it:

"And ye shall hallow the fiftieth year, and proclaim liberty throughout all the land unto all the inhabitants thereof: it shall be a jubilee (i.e., a time of rejoicing") unto you; and ye shall return every man unto his possession ... (in other words, everyman in Israel would have his former possessions returned to him).

"A jubilee shall that fiftieth year be unto you: ye shall not sow, neither reap that which groweth of itself in it, nor gather the grapes in it of thy vine undressed.

"In the year of this jubilee ye shall return every man unto his possession.

"IN THE YEAR OF THE JUBILEE THE FIELD SHALL RETURN UNTO HIM OF WHOM IT WAS BOUGHT, EVEN TO HIM TO WHOM THE POSSESSION OF THE LAND BELONGED originally)." (Lev. 25:10-11, 13, 24)

This is hardly a system of things that would be approved today by Bank of America and Wells Fargo, and by the "Captains of Industry." How long do you suppose modern capitalism would survive under this kind of system? [Please see our article, "Capitalism and Christianity."]

WHO WILL BE SAVED, AND
WHO WILL BE LEFT TO DROWN?

The thought that creditors (i.e., the mavens of Wall Street) should take a loss on their "financial bets" is anathema to the elites - and thatís what the $700 billion bailout is all about. Hudson explains:

"As matters now stand, the $700 billion is to be used to finance this yearís annual bonuses, this yearís million-dollar salaries and sales commission, and to contribute yet more to the retirement funds for the golden parachutes that financial managers have siphoned off to provide a safety net for themselves. So we are back to the basic motto these days: ĎYou only have to make a fortune once in a lifetimeí. Now is the time to make these fortunes as big as theyíre going to get. Because itís all down hill from here."

NOTE: There is, of course, talk by both Republican and Democratic leaders that provisions have been made to prevent the rich from utilizing "golden parachutes" and other such devices, but thatís all it is. The provisions being talked about are as meaningless and empty as talk that the elites have only the welfare of average Americans in mind insofar as the bailout is concerned.

All this lends a certain somber credence to the words of Honore de Balzac:

"Behind every great fortune there lies a great crime."

Hudson adds ominously,

"A bailout is designed to keep the boat afloat. But the existing Wall Street boat crafted by the investment bankers seeking to unload their junk must [inevitably] sink. THE QUESTION AS IT SINKS IS SIMPLY WHO WILL BE ABLE TO GRAB THE LIFEBOATS, AND WHO DROWNS."

THERE IS A REASON WHY THE
"BAILOUT" WILL UTIMATELY FAIL

There is, naturally enough, a very good reason why the "bailout" will ultimately fail - and thatís because there is NO way that real estate values will, over the long run, rebound to their hyper-inflated prices of 2005-2006. Every major real estate advisor on record has forecast a further drop of between 20 to 30 percent in property values over the coming twelve months. This is now the standard forecast. It means that over and above the five million arrears and foreclosures that Mr. Paulson has already acknowledged are on the books, yet more families are to give up the fight by this time next year - throwing ever more empty homes onto the market. The fact is, as Hudson says,

"Housing and commercial real estate already are so heavily mortgaged that there is no real value left in them."

In other words, THERE IS NO WAY THE BANKS CAN MAKE MONEY ON THESE LOANS UNLESS AND UNTIL THE PRICE OF HOUSES FALLS ANOTHER 20 - 30 PERCENT, AND PROBABLY MORE THAN THAT.

People who buy into the real estate market today - even at todayís depressed prices relative to the price of these homes in 2005 - 2006 - will ultimately suffer a loss of 30 percent or more.

What the elites are trying to do is hide this fact from average Americans by temporarily stalling this reality from manifesting itself while they get their money out of the market (and we speak here not only of the real estate market, but the stock market which is by now joined at the hip to the mortgage crisis) prior to its inevitable and final crash. Thatís what the $700 billion bailout is all about. Hudson writes:

"It is necessary, even inevitable, for the volume of debt to come down - not up - to restore equilibrium. The economy was well on its way to preparing the ground for this last week ... Such debt writes-offs are a precondition for writing down Americaís mortgage debts to levels that are affordable."

But again, if the market were allowed to fall "naturally," and in the precipitous fashion that it was doing, the elites would take the hit. In other words, prices on housing in the United States must be allowed to sink another 20 - 30 percent (and perhaps even more -this in addition to the price slump of some 30 percent that homes have already suffered) before there will be a market for them again, OR - put another way - before average Americans can once more afford to begin buying homes.

Again, what the elites are trying to do is give the illusion that the real estate market (and Wall Street) has stabilized, and itís safe for average Americans to come back in; when they do, the elites will swoop in, grab the money - that in addition to the $700 billion - and run.

NOTE: The increase in the amount of money that homeowners are being forced to spend on their mortgage payments has had a devastating effect on average Americans; they have had to spend more and more of their incomes on their monthly mortgage payments, and less and less money for the purchase of other "outlays" such as car payments, clothing, vacations, and other goods and services. This alone has had the effect of making a recession all but inevitable, because as sales of these goods and services in the larger economy have stalled, jobs have been lost and unemployment has risen.

This reality did not "hit" average American homeowners until recently because they have been supplementing their income by leveraging the equity in their homes. But now that this is no longer possible, the dam is beginning to burst insofar as the so-called "real economy" is concerned.

Moreover, as the purchasing power of average Americans has been reduced, revenues generated from sales taxes have been correspondingly reduced, leading to growing layoffs in the so-called "public sector" of the economy.

A "cognitive dissonance" has been reached: no matter which way housing prices go - up or down - a recession is inevitable: If housing prices stabilize and resume moving upward (which is what the elites are trying to accomplish at least temporarily with their bailout), the amount of money that can be spent by consumers in the "real economy" must shrink - leading to more job losses; but if housing prices continue to fall, pension funds, IRAs, etc. (all of which have been pegged to the hyper-inflated value in the real estate market) lose their value, stripping people of their life-savings. Either way, "average Americans" are going to "take it in the shorts." Inevitably, of course, real estate values will continue to decline - and some analysts say that the decline of real estate values may very well continue for the next ten years.

The elites, however, are dead-set against suffering the same disaster that average Americans are fated to suffer. Hudson continues:

"Mr. Paulsonís plan is to fight against this tide [i.e., the inevitability of a steep fall in housing prices and hence a steep loss on the value of the equities the elites hold]. He [Paulson] wants Wall Street to keep on raking in money at the expense of the economy at large. These are the big banks who lobbied Congress to appoint de-regulators, the banks whose officers paid themselves enormous bonuses and gave themselves enormous golden parachutes."

In other words, Mr. Paulson wants Congress to suspend the "Law of Supply and Demand" for the benefit of the elites he serves; he wants to give the elites a chance to save themselves from the fate that ordinary Americans are going to be forced to suffer. Hudson continues:

"This legislation is a giveaway of unprecedented magnitude - one that would cripple the Ďreal economyí for as far as the eye can see."

A "SILVER LINING" FOR AMERICANS; A
NIGHTMARE FOR THE REST OF THE WORLD.

There is, however, a "silver lining" for many - though certainly not all - average Americans, and it is this: The elites have an abiding fear of the "masses in the streets." There is nothing so much as the thought that they could suffer the wrath of what they call "the mob" that sends shivers up their spines; the nightmare that they could suffer the fate that the French and Russian elites suffered at the hands of their enraged populations 250 years ago and 90 years ago respectively. It is a nightmare that is permanently etched into their brains.

As a result, while the elites cannot save the great majority of "average Americans" from the economic catastrophe that is about to overtake them, they can still save a lot of them, and mitigate the fate of many millions more. And how is that?† By squeezing most of the $700 billion in bailout funds out of the rest of the world. They can do that by putting their TRIBUTE SYSTEM into overdrive and wringing the money out of the EU, Japan, and the rest of the world. [Please see Part 3 of Chapter XII of the NEW ANTIPAS PAPERS, "U.S. Economic Supremacy," for an explanation of the functioning of Americaís tribute system.]

GENERATING A MILITARY CRISIS &
IMPRISONING "ENEMIES OF THE STATE"

But as we said in our last "main article" - "We Have Reached a Crisis Point" - squeezing that much money out of Americaís slave-states will take a massive increase in the size of the U.S. military, which in itself would necessitate some kind of "military crisis" that would scare the hell out of Americans - something akin to another 9-11, only much worse! And make no mistake about it: The elites are perfectly capable of "generating" such a crisis. [Please see our articles, "Conspiracy Theories," "MK-Ultra: The Search for the Manchurian Candidate" and "Now Is the Time to Do Something; It May Be too Late Tomorrow."]

For those Americans whom the elites are not able to save, thereís always prison and the fact that the U.S. now possesses the ability to "disappear" people under color of the so-called "War on Terror." [Please see our articles, "The Birth of a Christian Police-State," "The Watchers Are Watching You," "I Was in Prison and Ye Visited Me Not" and "The Utility of Police Brutality in the Eliteís War against the Poor."]

More about all this in upcoming articles.


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S.R. Shearer
Antipas Ministries

 

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